The National Gas Company (NGC) and Methanol Holdings (Trinidad) Limited (MHTL) have failed to renew a contract for the continued supply of gas, which has forced the energy giant to idle two of its plants because the proposed prices are too high.
MHTL falls under the purview of the Proman Group. In an internal message to employees, managing director Claus Cronberger said the company was working on a long-term gas supply contract since March but due to high pricing by the NGC it was unable to secure a favourable contract.
He said while it was able to run its operations in March, the high gas pricing by NGC for April has forced MHTL's plants to be economically unstable. As such two of its plants will be idled but noted that jobs will not be affected.
Cronberger said, “I regret to inform you that we have been unable to source and economically viable short-term gas supply contract for the month of April and therefore we gave had to take the extreme difficult decision to idle M4 and M5000 plants, effective immediately. M2 and M3 will continue running on DeNovo gas only.
“While we have reached the absolute limit of our flexibility on contract price and the terms and conditions, we are continuing to take a solutions-oriented approach and engaging with NGC and the government. My number one priority is to sustain operations and secure the livelihoods of all of our people.”
Cronberger, however, noted that if the situation persists and they are forced to shut down for a longer period of time, then they will have to revisit its overall operations.
Also, in a media release NGC said the end of this particular contract became effective April 1, despite its efforts to reach an agreement, but it will continue to engage with MTHL for other gas sales.
“NGC will continue to exert all reasonable efforts to try to secure a mutually acceptable agreement with MTHL. NGC will continue to honour its contractual obligations for the supply of gas to MHTL under its other gas sales contract.”
NGC added that it would not be discussing the matter further because of its confidentiality clauses and assures that it was working with stakeholders across the gas value chain to protect business interests in the current environment.